It’s little wonder this report is given the spotlight, since counting the national number of items produced (and the capacity to produce them) results in numbers that speak volumes about the current and potential economic health of the country.

More stuff, goes the theory, means more demand, both for the stuff and for the space and infrastructure to move, warehouse and sell the stuff. And of course it’s the job of the industrial commercial property sector to match that demand for that space with supply. As far as Fed utterances go, industrial REALTORS® might not have a more important national report to review than good old G.17 Industrial Production And Capacity Utilization.

Industrial Production: 2007 As Benchmark

As a nod to the peak before the valley of the recession, categories in the industrial production report are expressed as percentages of that 2007 peak. So, 100=(2007 levels). Numbers north of 100 mean numbers in excess of 2007 levels and of course numbers south mean a shortfall.

“Industrial production increased 0.3 percent in December after having risen 1.0 percent in November when production rebounded in the industries that had been negatively affected by Hurricane Sandy in late October. For the fourth quarter as a whole, total industrial production moved up at an annual rate of 1.0 percent. Manufacturing output advanced 0.8 percent in December following a gain of 1.3 percent in November; production edged up at an annual rate of 0.2 percent in the fourth quarter. The output at mines rose 0.6 percent in December, and the output of utilities fell 4.8 percent as unseasonably warm weather held down the demand for heating. At 98.1 percent of its 2007 average, total industrial production in December was 2.2 percent above its year-earlier level. Capacity utilization for total industry moved up 0.1 percentage point to 78.8 percent, a rate 1.5 percentage points below its long-run (1972–2011) average.”

The manufacture of more stuff, and the accompanying upward pressure on industrial capacity utilization means heightened national demand for industrial property.